Taxpayers' £50m bill as Comet fails

TAXPAYERS face a £50million bill and creditors will lose £233million when the Comet electrical chain closes its doors for the last time today.

Comet shut in one of the biggest high street collapses since Woolworths in 2008

The last 49 shops of the once 236-strong estate are to shut in one of the biggest high street collapses since Woolworths in 2008, costing 6,895 people their jobs.

In a report on Comet's demise, administrators Deloitte said so far efforts to find a buyer for the group had failed though it was still in talks "with a small number of parties".

In a statement of proposals to be sent to creditors joint administrators from Deloitte said the £23.2million redundancy costs would come from the Government's Redundancy Payments Service, while the Government was also owed £26.2million in unpaid taxes including VAT and PAYE.

Unsecured creditors, including some suppliers and landlords and HM Revenue & Customs, stand to lose £232.9million.

Secured creditors were owed £145million but were likely to face a shortfall of £96million.

Comet's collapse cost 6,895 people their jobs

Accounts showed sales in the year to the end of April were £1.27billion, about £200million lower than in the previous year. Over the same period losses ballooned from £31.7million to £95.2million.

Established in Hull in 1933, Comet started selling batteries and radios and developed into a nationwide chain of 235 stores selling a wide range of electrical goods.

It was bought in 1984 by Kingfisher and later sold to Kesa Electricals, which put it up for sale in June last year before selling it to Hailey Holdings, advised by OpCapita, for £1 plus a £50million dowry five months later.

The administrators said concerns about Comet's ability to survive resulted in the loss of credit insurance cover and a turnaround plan was launched including cost-cutting.

It became clear on October 31 that Comet did not have sufficient funds to meet its obligations and directors decided to put it into administration.

Controversially Hailey and OpCapita are secured lenders to the company and will be at the front of the queue when the administrators distribute funds.